PSU Investments to Drive Growth

NEW DELHI: With an assured investment of Rs 2,47,941 crore in 2014-15 from different public sector undertakings, the government is looking to bring the economy back on track. This will revive investment cycles, create jobs and provide impetus to the manufacturing sector that has been registering negative growth in the last four quarters.

According to their own internal assessments post Budget 2014-15, companies like BHEL, ONGC and SAIL expect big orders in the future.

With the government announcing a Rs 50,000-crore equity fund for the power sector to achieve 24x7 power supply across the nation in the next five years, BHEL and SAIL feel the revival of power projects that are stalled for want of necessary forest and environment clearances would be re-started with the aid of asset reconstruction companies.“Whenever the infrastructure sector opens up, it is an opportunity for the core sector. We certainly will look at getting a fair share of the orders; also the revival of stalled projects will lead to creation of business,” a senior BHEL official said.

Tax holidays are also expected to attract investments in the sector. “The sunset clause of tax holiday for power companies has been extended for 10 years. This will help attract fresh investment in the sector as projects that begin generation of power before 31.03.2017 will get the required tax benefits for a full decade. This should be attract new power players and lead to faster project completion as new players would want to fire their plants fast to draw maximum benefits of the tax holiday,” the official added.

The government has assured coal supply to thermal power plants being commissioned by March 2015 but the ‘critical’ coal reserves that several NTPC-run power plants have been facing have left private power producers worried. “We feel assured coal linkages by the government should be provided to incentivise the sector. Imported coal immediately increases the cost of per unit of electricity which has to be passed on to the end-user,” a private power producer said. “Even if a part of the envisaged plan gets out of the drawing board, the Indian economy has a great chance of a quick turn around,” the power operator said.

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